KHIVRAJ MOTORS versus THE GUANELLIAN SOCIETY

Citation: [2011] 6 S.C.R. 1165 · Decided: 04-07-2011 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Dismissed

Judgment (excerpt)

[2011] 6 S.C.R. 1165 
KHIVRAJ MOTORS 
v. 
THE GUANELLIAN SOCIETY 
(Civil Appeal No. 4926 of 2011) 
JULY 04, 2011 
[R.V. RAVEENDRAN AND A.K. PATNAIK, JJ.] 
A 
B 
Arbitration and Conciliation Act, 1996 -
s. 11 -
Application under, for appointment of arbitrator - Joint 
Development Agreement (JOA) in respect of /and/property in C 
question between appellant (as developer) and President of 
respondent Society (as owner of the property) - Power of 
Attorney executed by the President of the Society in favour 
of the appellant - Resolution by respondent Society that 
President was not authorized to deal with property, thus, JDA 
D 
and Power of Attorney were null and void - Application filed 
by respondent Society uls. 11 for appointment of arbitrator to 
resolve the dispute - Allowed by High Court - Maintainability 
of the application filed by respondent society u/s. 11 - Held: 
The application was maintainable as the appellant and the 
E 
respondent in the application uls. 11 were parties to the JOA 
containing a provision for settlement of disputes arising out 
of the agreement by arbitration - Arbitration agreement was 
an independent agreement incorporated and rolled into JDA 
- President did not execute JOA or the power of attorney in 
F 
. his individual capacity - The executant was the respondent 
Society represented by its President - Respondent Society 
is the first party under the JOA and not the President -
Arbitrator entitled to examine the validity and binding nature 
of JOA. 
Appellant as developer of the property/land in 
question and 'AJ', President of respondent society as the 
owner thereof, allegedly entered into a Joint 
Development Agreement for development of the said 
G 
1165 
H 
) 
1166 
SUPREME COURT REPORTS 
[2011] 6 S.C.R. 
A land. Clause 18 of the agreement provided for settlement 
of disputes arising out of the said agreement by 
arbitration. 'AJ', President of the respondent Society 
executed a power· of Attorney in favour of the appellant 
in connection with the development of the property. The 
B respondent Society passed a resolution that the 
Managing Committee of the Society did not authorize its 
President to deal with the property and, therefore, the 
Joint Development Agreement and general power of 
attorney executed by him were null and void and not 
C binding on the Society. The respondent Society filed an 
application under Section 11 of the Arbitration and 
Conciliation Act, 1996 for appointment of an arbitrator for 
resolution of the disputes between the Society and the 
appellant. The application was allowed holding that the 
Joint Development Agreement was executed between 
D the respondent Society and the appellant and 'AJ' had 
signed the said agreement, only in his capacity as the 
President of the Society and not in his individual 
capacity. Therefore, the appellant filed the instant appeal. 
E 
Dismissing the appeal, the Court 
HELD: 1.1 'AJ' has neither executed the Joint 
Development Agreement nor the power of attorney in his 
individual capacity and the executant is the respondent 
F Society represented by its President 'AJ'. Thus, the 
respondent Society is the first party under the Joint 
Development Agreement and not 'AJ'. If 'AJ' was 
executing the Joint Development Agreement in his 
personal capacity, there was no need for him to describe 
G himself as the "President of the respondent Society" and 
sign the document for and on behalf of the respondent 
Society, as its President. Therefore, the application under 
Section 11 of the Arbitration and Conciliation Act, 1996 
filed by the Society was maintainable as the petitioner 
and the respondent in the application under Section 11 
H were parties to the Joint Development Agreement 
KHIVRAJ MOTORS v. GUANELLIAN SOCIETY 
1167 
containing a provision (Clause 18) for settlement of A 
disputes arising out of the agreement by arbitration. 
[Paras 8 and 9] (1171-B-H] 
' 
1.2 The respondent Society no doubt contended that 
the contract was concluded with unconscionable and 
8 
unfair terms and that the Managing Committee of the 
Society had not authorized its President 'AJ' to enter into 
any such Joint Development Agreement. These 
allegations no doubt relate to the validity of the Joint 
Development Agreement, but would have no bearing on 
the validity of the arbitration agreement (Clause 18 of the C 
agreement), which is an independent agreement 
incorporated and rolled into the Joint Development 
Agreement. The Arbitrator

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